Goldman Sachs bails out on Cherry Point coal port builder

A subsidiary of Goldman Sachs has sold its 49 percent share in the parent company of SSA Marine, the big Seattle-based terminal operator that is pushing to build the $660 million Gateway Pacific coal export terminal at Cherry Point near Bellingham.

The sale comes months after Goldman, in a paper on investing, concluded: “Earning a return on incremental investment in thermal coal mining and infrastructure capacity is becoming increasingly difficult.”

The prospect of mile to mile-and-a-half long coal trains, passing along Seattle and other waterfronts, has helped spur opposition to a giant proposed coal export terminal north of Bellingham.

SSA Marine said the sale makes no difference in its drive to export as many as 48 million tons of coal a year, largely to fuel power plants in China. “We are full speed ahead on the Gateway Pacific Terminal,” Bob Watters, a vice president at SSA Marine, e-mailed the Bellingham Herald.

But Eric de Place of the Sightline Institute, which has done research critical of the coal port, opined: “It is reasonable to think Goldman’s departure is, at minimum, an indication Wall Street is losing confidence that Whatcom County will host a profitable coal terminal.”

The decision on whether to approve Gateway Pacific rests with the Army Corps of Engineers, the state, and Whatcom County. In a nationally watched election, four conservationist-based candidates swept elections for the Whatcom County Council last November. The council has quasi-judicial powers to issue — or deny — permits for the project.

“In business, time is money: They have to look at public opposition — even if it doesn’t block eventual approval — as requiring much additional time, money and effort,” said ex-Seattle Mayor Mike McGinn, who has campaigned against the mile to mile-and-a-half long coal trains that would pass along waterfronts in Seattle, Edmonds, Mukilteo, Marysville and Bellingham.

There was a buyer for the Goldman Sachs stake.

Goldman Infrastructures sold its shares in Carrix, SSA Marine’s holding company, back to the founding Smith and Hemingway families, who hold a 51 percent stake. In turn, they have sold the 49 percent share to wealthy Mexican investor Fernando Chico Pardo, a longtime associate of telecommunications billionaire Carlos Slim.

Coal plants are closing across America, the result of competition from less polluting natural gas, and regulations on emissions of greenhouse gases.

“We’ve been fortunate in the past seven years to work closely with one of the world’s leading investors in infrastructure and their fine people, but appreciate that, as with all investment funds representing an array of investors, they approach their investments with a need to invest, hold and then sell over a defined time frame,” Jon Hemingway of Carrix said in a statement.

In its coal assessment, Goldman Sachs cited three factors as reason why coal might not be a wise investment in the long term.

–Environmental regulations that discourage the location and operation of coal plants. Such longtime coal users as even the Tennessee Valley Authority are shutting down coal fired power plants.

–Competition from natural gas: Less-polluting gas, once described by energy analyst Daniel Yergin as “the prince of fuels,” is displacing coal as domestic supplies of gas go up and the price comes down. Washington’s one operating coal plant is being phased out with an eventual switchover to gas.

–Less demand for electricity due to increased energy efficiency.

“Even Wall Street has realized coal is toxic for our economy as well as our environment,” said Collin Jergens of Fuse Washington, the state’s largest progressive activist organization, which has mobilized anti-coal port turnout at Army Corps of Engineers hearings.

A second major coal port proposal — for Longview on the Columbia River — is not affected by the Goldman Sachs sale.

SSA Marine has a lot more irons in the fire than its Gateway Pacific proposal. The company bills itself as “the world’s largest independent privately held marine terminal operator, with activities in more than 210 terminal facilities.”

The company once seemed to have a lock on the proposed Cherry Point coal port. It rounded up support from business and labor groups, won backing from elected officials, and hired a Wahtcom County civic leader — Craig Cole — to be the public face of the project.

Coal companies and railroads fielded an “Astroturf” grassroots group, the Northwest Alliance for Energy and Jobs, to promote Gateway Pacific and other coal port proposals. Backers snapped up services of supposedly liberal public relations firms with ties to Democratic politicians.

Still, Whatcom County and Bellingham are longtime environmental strongholds. The fire marshal had to limit the crowd when more than 350 people showed up for a Bellingham City Club debate about Gateway Pacific. About 500 people showed up at Bellingham High School to organize opposition.

Supporters of the coal port were a majority when the Army Corps held a hearing in Ferndale. But opponents dominated proceedings in Bellingham, with more than 2,300 coal port opponents showing up for a Seattle hearing. The hearing even produced a united front of McGinn and Seattle City Council members who would go on to oppose his reelection.